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June 17, 2009

What Fueled the Failure

"Innovation Interrupted" (Cover Story, June 15) brought a flood of thoughtful e-mails and comments, lots of debate on my Economics Unbound blog, and useful discussion on other Web sites. Some found the idea of an innovation shortfall excessively pessimistic. But pointing the way toward a potential followup story, most focussed on an issue I left out: How did the world's most innovative economy fail in this way?

By Michael Mandel

A key reason for "the failed promise of innovation" is the near-universal misconception that [innovation] equals science and technology....I advise my clients...to go where others don't—to the many mundane, repeatable, low-tech innovation sources.

Douglas Moore, Moore Innovation, East Windsor, N.J.

Where Mandel's explanation comes up short is: What are these innovators doing wrong? And if we're failing as innovators, how do you design a macroeconomic policy to unleash ideas?

Derek Thompson, business.theatlantic.com

Our analysis shows that return on innovation has been poor, implying inefficiency of the innovation process....There is a lot of work to be done to understand [the] science of innovation.

What do you expect when the people who caused the global financial meltdown were/still are making more money than all the scientists and engineers who created the Internet?

Screen name: George

From 1999 on, the emphasis of business was on increasing profits by cheapening labor, not through innovation, but through globalization.

Screen name: Tom E.

You not only need new technologies, you need new management techniques. The transcontinental railway, another piece of government meddling in private enterprise, had been running 20 years before the railroads realized that it made sense to manage freight runs end to end rather than having each district manager focus on getting freight out of his district.

Screen name: Kaleberg

Gloomy Gus, what's your deal? Flat-screen TVs, mobile devices, cell phones, GPS, high-def TVs, the information of the world at your fingertips, e-mail, YouTube, Hulu. This is over the last 15 years, most of it over the last 10.

Screen name: ctl

GM's Failing Marketing Model

"We're Sorry. Buy Our Cars" (New Business, June 15) says GM ads for the new Buick LaCrosse will feature the car's "array of Lexus-caliber gadgetry." But it fails to note that it's a costly option. A big reason GM has been in a downward spiral is precisely this "option-based" profitability model. Until GM understands that consumers resent paying much more to get features highlighted in ads, CEO Frederick Henderson will be reliving, not rewriting, history.

Robert Winsor,

Professor of Marketing Strategy,

Loyola Marymount University,

Los Angeles

Beyond Gender and Race in the C-Suite

I'm tired of the media ticking off boxes for each "subgroup" that gets a position of status ("An Historic Succession at Xerox (XRX)," News, June 8). As a Xerox investor, I could not care less about the new CEO's gender or race. I care about competence and ability to lead.

Brian Farmer,

Cedar Rapids, Iowa

Fat Bonuses Give the Lie to 'Shared Sacrifice'

"Cutting Salaries Instead of Jobs" (What's Next, June 8) states: "Uniform pay cuts can be felt as a shared sacrifice." But the issue of executive bonuses is completely ignored. Hewlett-Packard (HPQ) gave its boss, Mark Hurd, a $23.9 million bonus last year. Is taking a 20% base salary cut with the left hand, while grabbing $23.9 million with the right, sharing the pain?